Citizens for Tax Reforms Tax Expenditure Limitation
(TEL) Amendment limits state and local government annual spending
growth to 3.5 per cent or the sum of the rate of inflation plus
population growth. Any year-end unspent revenue over 10 per cent
of the budget is to be refunded to taxpayers. Local governments
receive a guaranteed five per cent of the previous fiscal years
aggregate state expenditures, and unfunded mandates are forbidden.
The Attorney General has approved petition language and circulation
has begun. Citizens for Tax Reform will collect the necessary
322,899 signatures by the state mandated August 10 deadline to
qualify for the November 8 ballot.

TEL Amendment Frequently Asked Questions & Answers:

Citizens for Tax Reform's Tax Expenditure Limitation (TEL)
Amendment limits state and local government annual spending growth
to 3.5 per cent or the sum of the rate of inflation plus population
growth. Any year-end unspent revenue over 10 per cent of the
budget is to be refunded to taxpayers. Local governments receive
a guaranteed five per cent of the previous fiscal year's aggregate
state expenditures, and unfunded mandates are forbidden. The
Attorney General has approved petition language and circulation
has begun. Citizens for Tax Reform will collect the necessary
322,899 signatures by the state mandated August 10 deadline to
qualify for the November 8 ballot.

Q. Why does Ohio need a TEL?
A. Ohio state government spending is growing at an unsustainable
rate, 71 per cent since 1994. This rate of spending growth drives
jobs out of Ohio and saddles remaining taxpayers with unreasonably
high burdens.

Q. How many other states have TELs?
A. Twenty-six states have either tax or spending limitations.
New Jersey passed the first TEL in 1976, and Ronald Reagan helped
promote Prop 13 in California in 1978.

Q. Colorado has a TEL and some say their state government
has been hamstrung in their efforts to adjust to a changing economy.
Won't this cause the same problems for Ohio?
A. Colorado's situation is different because their amendment
requires approval of all tax increases (not spending increases)
and was later amended to allow accelerated K-12 education spending.
Ohio's amendment only limits what is spent, not how it is raised,
and contains a 'poison pill' that voids the spending limit if
other amendments authorizing higher spending are passed.

Q. Why change the Constitution to do this?
A. Putting this in the Constitution puts an institutional wall
in place against increased taxes and spending. John Hancock said,
"Constitutions are not restrictions by government upon the
people, constitutions are restrictions by the people upon the
government."

Q. What is notable in Citizens for Tax Reform's latest petition
language?
A. 1) This petition language allows state spending to increase
3.5 per cent or the sum of the rate of inflation plus the increase
in population, whichever is higher.
2) Local governments receive a guaranteed baseline spending level
of five per cent of state revenues and state government is forbidden
from placing duties on local government without providing the
revenue to perform them (no unfunded mandates).
3) A simple legislative majority can authorize a statewide referendum
on higher spending.

Q. If this TEL was in place two years ago, how would it have
changed Ohio's budget?
A. State spending went up 11 per cent in the FY04-05 budget.
If the TEL was in place the most state spending could have increased
was seven per cent - a savings of nearly $2 billion in general
fund dollars alone.

Relevant Economic Facts:

- According to the Federal Reserve Bank, the U.S. inflation rate
was 2.2 per cent in 2003 and 3.0 per cent in 2004.
- The U.S. Census Bureau estimates Ohio's population grew:
" 22,536 to 11,410,396 by July 1, 2002 from 11,387,860 on
July 1, 2001 = .20 per cent
" 27,284 to 11,437,680 by July 1, 2003 for an increase of
.24 per cent
" 21,331 to 11,459,011 by July 1, 2004 for an increase of
.19 per cent